RS

F

AN

NU

AL

R

EP

OR

T

20

18

1Photo caption

I N V E S T. G I V E . G E T F U N D I N G . I R S F S O C I A L F I N A N C E . O R G

2 0 1 8 A N N U A L R E P O R T

IN

VE

ST

.

GI

VE

.

GE

T

FU

ND

IN

G.

2

“…

T A B L E O F C O N T E N T S

Letter from Our CEO 3

Letter from Our Board Chair 4

2018 Snapshot 5

Client Profiles

Nikishka Iyengar 6

Marco Vangelisti 7

Suzanne Biegel 8

Associative Economics 9

Social Enterprise Profiles

Akola 10

Crown O’ Maine 12

Eureka Recycling 14

Biodynamic Association 16

Partner Profile

Chordata Capital 18

Financials 20

Diversity, Equity, and Inclusion 22

Staff and Board 23

Cover photo: Nikishka Iyengar. Integrated Capital Institute Fellow and Investor. Photo by Daniel Ségun.

Photo above: 2019 RSF Staff. Photo by Roots & Shoots Photography.

Staff not pictured: Alexandria Cabral, Amy Bird, April Hines, Carrie Stallings, Donna Daniels, Ellie Lanphier, Hadiza Dalhatu, John

Bloom, Mindy Christensen, Reed Mayfield.

IN

VE

ST

.

GI

VE

.

GE

T

FU

ND

IN

G.

2

RS

F

AN

NU

AL

R

EP

OR

T

20

18

3

L E T T E R F R O M O U R C EO

Dear Clients and Friends,

I write this with deep gratitude for the RSF community. Because of your commitment, we’ve been able to flow money to social enterprises working to solve the world’s most pressing problems. You’re also helping us build the awareness needed to shift the financial system to be more equitable and compassionate. After my first year as CEO of RSF Social Finance, I am even more committed to working together toward a just and sustainable future.

Last year was an unqualified success. We ended 2018 with over $225 million under management and helped circulate $80 million into the economy to bring healing and regeneration in a world filled with toxic and extractive practices. Thanks to the support of our clients, we provide funding to groundbreaking social enterprises, and create positive connections and working relationships within our community.

With our unique integrated capital approach—the use of different forms of financial and social capital—we demonstrate that finance can be highly intentional and achieve tangible and measurable outcomes at the same time.

In our economy, people and the earth have become commoditized and oftentimes directed by capital. At RSF we practice a much-needed paradigm shift: capital exists to serve people and the earth. Our work is to find and fund transformational solutions at

the intersection of social and environmental justice, and to foster a vibrant, diverse culture that embraces this new awareness.

Highlights of 2018 include a record-breaking $60 million in catalytic, integrated capital loan disbursements to social enterprises across the United States in the sectors of Food & Agriculture, Education & the Arts, and Climate & Environment. Originating from philanthropic funds, over $20 million in grants was put to work domestically and internationally.

RSF has partnered with Purpose Ventures to deepen our work on alternative business structures: supporting new forms of governance and ownership that enable the mission of a company to be its north star rather than the maximization of shareholder returns. Aligned with associative economics, this approach questions the nexus between money and power and puts decision making in the hands of stakeholders.

In July, as an example of this pioneering shift to an alternative business structure, Organically Grown Company (OGC) became the first U.S. enterprise to become a perpetual purpose trust. The structure takes the potential of OGC’s sale off the table, maximizes purpose by creating long-term returns for mission-aligned, evergreen investors, and shares the balance of profits with stakeholders. RSF provided a loan to help buy out OGC’s previous shareholders and recapitalize the business.

RSF’s Integrated Capital Institute graduated its first cohort and welcomed its second cohort of Fellows, change-makers and activists who leverage capital as a tool for positive change. The Institute is a prime example of how RSF’s practices and insights are shared and how we listen to, and learn from, other cutting-edge practitioners of regenerative finance.

This report reflects the passion and hard work of our team and community of clients.As we look to the year ahead, our work to create a compassionate and regenerative economy has never felt more urgent. We remain committed to pursuing transformative change, and we thank you for your commitment and engagement.

With gratitude,

Jasper J. van Brakel,Chief Executive Officer

IN

VE

ST

.

GI

VE

.

GE

T

FU

ND

IN

G.

4

L E T T E R F R O M O U R B OA R D C H A I R

Best Regards,

Ron Alston,Board Chair

Thank you to our

generous donors for their

ongoing support of Money

to Transform, RSF’s

fundraising initiative.

The gifts have allowed

us to strengthen our

field building, thought

leadership, operational

infrastructure, and

Integrated Capital

Institute.

Greetings,

I am honored and humbled to have assumed the role of Chair of the Board of Trustees of RSF Social Finance, and delighted that we welcomed two new members, Jovial King and Stephanie Rynas, to the RSF Board in 2018.

It is a privilege to work alongside Jasper J. van Brakel, the Executive Team, and the staff of RSF to further the mission of creating financial relationships that are direct, transparent, personal, and focused on long-term social, economic, and ecological benefit. The board and I are are excited to support this talented staff in its work to use finance as a regenerative tool to build more just, equitable, and thriving communities.

We accomplished much in 2018 and are proud, not only of the financial results of the organization, but more importantly, of the impact we had through our relationships with social enterprises, investors, and donors. These relationships and collaboration are central to the creation of new models of working together and fresh ways of engaging with finance to explore the role of money in our lives and interact with it in more meaningful ways.

We are so very grateful to all of our stakeholders for your commitment and trust. We look forward to partnering with you in the future on this very important and transformational journey.

RS

F

AN

NU

AL

R

EP

OR

T

20

18

5

OUR 1,972 INVESTORS AND DONORS HELPED

US PROVIDE OVER

$80M I L L I O N

TO SUPPORT RSF’S FUNDRAISING INITIATIVE, MONEY TO TRANSFORM

$50

22

IN INVESTMENT NOTES AND GIFTS, INCLUDING

IN ASSETS UNDER MANAGEMENT

F E L L O W S

2 0 1 8 S N A P S H OT

IN LOAN DISBURSEMENTS AND GRANTS TO

695SOCIAL ENTERPRISES

WE RAISED

$1.9M I L L I O N

M I L L I O N

COMPLETED THE FIRST INTEGRATED CAPITAL

INSTITUTE PROGRAM; 24 ADDITIONAL FELLOWS STARTED IN LATE 2018

$225M I L L I O N

WE ENDED 2018 WITH

5

Photo top left: Eureka Recycling Co-Presidents, Lynn Hoffman & Kate Davenport. Photo by Mark Kegans.

Photo bottom right: Akola employee, Irene Namulemo and her family in Uganda. Photo by Ashley Turner.

IN

VE

ST

.

GI

VE

.

GE

T

FU

ND

IN

G.

6

Nikishka Iyengar WWW.THEGUILD.COMMUNITY WWW.WHOLESYSTEMSCO.COM

Nikishka Iyengar is a systems entrepreneur working at the intersection of finance, equitable

development, climate action, and racial justice. She is the founder and CEO of The Guild, a social

enterprise that builds community wealth through real estate and entrepreneurship programs. She

also owns Whole Systems Collective, an impact consulting firm focused on helping organizations

build a more just and regenerative economy. Nikishka has been an investor since 2011 and is an RSF

Integrated Capital Institute Fellow.

C L I E N T P R O F I L E

As a systems entrepreneur, I’m focused on using business as a force for good: one that centers on social justice and environmental sustainability, with the goal being not just profit, but also a social and environmental return. At The Guild we’re using the tools of integrated capital in the real estate space to center communities, so they have ownership and a say in how their neighborhoods develop.

The values that drive my work are justice, equity, and stewardship versus ownership as it relates to people and the planet. Many of our current systems, primarily our financial system, which includes real estate, are designed to be exclusionary and to benefit a handful at the expense of the majority.

I’m located in Atlanta, where communities of color have been and continue to be a very vital part of the city, but have been on the receiving end of discriminatory housing policies, from redlining to current waves of gentrification. The Guild focuses on how to change the current paradigm and redesign a system that centers these marginalized

communities in a way that can help build autonomy and power.

I found RSF after I graduated from college in 2011. It was the first time I was making money, and I wanted to think intentionally about how I was going to spend, save, and invest it. With my savings, I wanted to understand what my money was going toward while it was sitting in a big bank. I learned that the money in savings accounts was being invested in fossil fuels that accelerate climate change, or was financing private prisons that fueled mass incarceration of Black and Brown people. As someone who is committed to social change and justice, it felt like there was a misalignment between my values and my money.

What we purchase, how we save, and how we give away our money make us all investors. Money matters, and it has an effect in the world. The more conscious we are about it, how we relate to it, and what we do with it really matters. The more intentional we are about it, the more we can usher in this new world.

ALL INVESTORS 1 ,695

NEW INVESTORS: 144

TOTAL NOTES:

$13 2 MI LLI ON

SOCIALINVESTMENT FUNDHIGHLIGHTS

I NVESTORS

AVERAGE TERM:

9 YEARS

I NVESTOR NOTES

$19 MILLIONIN NEW NOTES

8%

14%

RS

F

AN

NU

AL

R

EP

OR

T

20

18

7

C L I E N T P R O F I L E

Marco Vangelisti EK4T.COM

PORTFOLIO ACTIVITY

33%

TOTAL PORTFOLIO: $127 MILLION

NEW LOAN APPROVALS: $42 MILLIO N

FOCUS AREASBY NUMBER OF LOANS

Food and Agr icu l ture

Educat ion and the Arts

Cl imate and Environment

Workforce Development and Soc ia l F inance

BORROWERS

ALL BORROWERS: 87

NEW BORROWERS: 8

9%

49%

12%

38%

1%

SOCIALINVESTMENT FUND

LENDINGHIGHLIGHTS

Marco Vangelisti is a founding member of Slow Money and the founder of Essential Knowledge for

Transition, where he works to empower his clients to learn essential portfolio management skills and

to align their financial resources with their values. He is dedicated to democratizing financial literacy

and sustainable investing. Marco has been an RSF investor since 2004.

My 20-year career in finance helped me realize the importance for everyone to understand the role their investments play in shaping our world. As a 100% impact investor, I share my experience with direct Slow Money investing to help communities increase their capacity for local investing through talks, workshops, and webinars.

I left the finance industry in 2009 after realizing the extent to which most financial returns are extractive and diminish the health of ecosystems and communities around the world. I do not want to grow my resources at the expense of other people or the environment, or by damaging communities anywhere.

After liquidating my investments in the opaque global financial system, I embarked on the task of rebuilding my portfolio so that first and foremost, it would do no harm, and wherever possible, would help create the world I wanted to live in by having a positive impact. This involved knowing the entities that would make use of my savings and establishing these direct relationships.

One of the first investments I made after divesting from the extractive global economy was in RSF’s Social Investment Fund. I liked its

commitment to using money as a tool for good. I appreciate the transparency that allowed me to know all the projects and entrepreneurs the Social Investment Fund supported.

I encourage investors to appreciate the non-financial benefits of their investments and to move beyond the narrow lens of conventional finance, which is focused solely on risk, return, and liquidity. This can be challenging because, truthfully, it is the inconvenient thing to do. This is partially due to the opaque landscape of our financial system, but our role is to show up in the world through our words, deeds, livelihood, and investments, which requires personal responsibility.

A similar analogy is a difference between fast food and slow food: in the short term, it’s easier to choose the hastily prepared meal, but when you consider the long-term, adverse health effects, you can recognize that it does have a high cost in many ways. Taking responsibility for our investments can be inconvenient, but it’s going to be good for our long-term survival and health as a species. The many challenges we face, both environmentally and socially, will not be solved if we do not engage our full portfolios in building a better world. RSF’s offering is an accessible way to embark on this necessary task.

IN

VE

ST

.

GI

VE

.

GE

T

FU

ND

IN

G.

8

Suzanne Biegel CATALYSTATLARGE.COM

Suzanne Biegel is the founder of Catalyst at Large and a global leader in gender-smart investing. She

leverages her deep networks in finance, philanthropy, development, research, and entrepreneurship

to connect public and private investors to the people and information they need to flow their capital

in a way that increases returns and moves toward gender equality. Suzanne is an RSF investor as

well as a donor to the Women’s Capital Collaborative.

C L I E N T P R O F I L E

My approach to philanthropy is about being in community with change-makers. My philanthropy is oriented around change, not charity, and this gives me the opportunity to learn about important issues from the experts. This community of learning gives me hope, energy, and insight, and has made me a better person.

Over time my approach to philanthropy has evolved. When I was younger, it was about writing checks for issues I was passionate about. A pivotal moment for me was when I joined Social Venture Network and Liberty Hill Foundation (in Los Angeles,) where I learned about social justice grantmaking and systems change. I try to act as a catalytic donor, which sometimes means being the first one in and using my philanthropy to spur things that are pre-investable, or being able to experiment with solutions.

When I joined Women Donors Network, I experienced a shift in understanding how gender equality and gender equity issues intersect with everything. It is my great desire to see a transformation in the ways that we think about women and invest in women, and to approach it from a more holistic perspective

that centers around gender impacts, but with a deep social impact agenda.

I recognize that this is going to take some experimentation and require some patient capital and different kinds of financial tools. Part of why I donate to the Women’s Capital Collaborative is to be able to do this work with a group of people who are committed to not just positive outcomes, but also to thinking about the process, and to learning and sharing. RSF's deep understanding of the issues and commitment to social justice are transforming how capital is used to support women’s entrepreneurship.

One reason I care about this lies in understanding the deep inequities that exist in women’s lack of access to capital. I prioritize improving women’s lives. Whether it’s in the areas of education, healthcare, the impacts of climate change, or lack of equitable access to resources, creating more gender balance would create a better world for all of us. If we’re not getting the benefit of 50% of the population’s talent, we’re not going to be able to solve the world’s problems. We need the benefit of these women: entrepreneurs, innovators, product designers, and scientists working to create solutions.

ALL DONORS: 289

NEW DONORS: 103

TOTAL GIFTS:

$30 MILLION

TOTAL FUNDS AT RSF:

$10.5 MILLION

INVESTOR-DONORS

DONORS

8%

AL L I NVESTOR -DONOR S: 148

35%

GIVINGHIGHLIGHTS

Our investor-donors recognize the

power of an integrated capi ta l

approach, leverag ing RSF programs

to invest and g ive in ways that

uphold core va lues and car ry

out intent ions .

RS

F

AN

NU

AL

R

EP

OR

T

20

18

9

As part of its vision for a just and regenerative economy, RSF Social Finance holds a fundamentally different view than that of the free market. It’s not just that we want to work past the inequity of our current economy. Rather, we are striving to serve the needs of people and the environment before the needs of capital itself.

This is a lofty goal that invites the question, “What might this look like in practice?”

We have received significant public recognition for our Community Pricing Gatherings. Each quarter we bring together representatives in our Social Investment Fund—investors, borrowers, and RSF staff—to make an interest rate recommendation for the upcoming quarter. This participatory process is radical and changes people’s perception of how money actually works in community with all stakeholders present.

This last year the demand for Shared Gifting Circles as an innovative approach to philanthropy grew tremendously. The idea is simply that a lump sum of money is offered to a group of charitable entities who then together determine what each organization receives. Each participant is both grantor and grantee. This revolutionary approach to grantmaking unwinds the conventional power dynamic of giver and receiver.

We recognize that each form of money—gift, loan/investment, and purchase—has an important role in the economy. In particular, we

understand gift as the foundation of economic life. Thus, philanthropic-based Collaboratives are not only important vehicles for cultivating a new economy, they are also places of practice, learning laboratories for transforming the flow of capital in its numerous forms.

What brings coherence to these radical approaches is that they are manifestations of ideas first articulated in 1922 by Rudolf Steiner as a solution to the profound economic chaos of his time—rampant inflation, class warfare, and tremendous wealth disparity. The central concept is one of associative economics. The purpose of economic associations is to bring together all the parties to determine levels of production based on actual need, ensure appropriate distribution, and set prices such that all parties are sufficiently satisfied. The operative principle of associative economics is compassionate interdependence, which requires that participants recognize that through working to meet the needs of others, their needs will be met. An associative economy replaces the competitive “marketplace” with a sense of collaborative responsibility for the whole economy.

O R G A N I Z AT I O N A L C U LT U R E

By John Bloom, Vice President, Organizational Culture

Associative Economics Made Visible

RSF’s Quarterly Pricing Gathering. David Brower Center, Berkeley, CA.

Photo by Daniel Ségun.

rsfsocialfinance.org/film

LEARN MORE ABOUT OUR PRICING GATHERINGS AT:

IN

VE

ST

.

GI

VE

.

GE

T

FU

ND

IN

G.

10

S O C I A L E N T E R P R I S E P R O F I L E

Akola AKOLAPROJECT.ORG

Akola spans two continents as a growing jewelry business that employs women in Uganda and

Dallas, Texas, who face high barriers to unemployment. In Uganda, Akola sources beads and charms

for its jewelry, while providing job training, professional development, and living wages to women.

In Dallas, Akola provides living wage jobs for women, notably single mothers, who are working to

support themselves and their families. RSF has provided loans to Akola from the Women’s Capital

Collaborative and the Social Investment Fund.

Our mission is to have

the entire supply chain—

from the artisans who

craft the beads in Africa,

to employees in Dallas

who work as retail

associates and run Akola’s

fulfillment center—

benefit women in need.”

In 2004, Brittany Underwood, then a college student, spent a summer teaching English in a village in Uganda. There she met Sarah, a woman her age who cared for 24 street children in her home. After realizing that it would take considerable effort to help heal the core causes of poverty there, Underwood founded Akola two years later to help women be self-sufficient and have a reliable income.

Since 2006, Akola has provided income, counseling, and financial literacy tools to more than 580 members, who care for more than 4,000 dependents. Our mission is to have the entire supply chain—from the artisans who craft the beads in Africa, to employees in Dallas

who work as retail associates and run Akola’s fulfillment center—benefit women in need.

In Uganda, we provide job training, professional development, and a living wage to over 200 women, who often open their own small business within three to five years. In Dallas, we provide a living wage to women through retail employment opportunities and professional development programming.

Neiman Marcus is one of our clients, and in 2017, the retailer wanted to double its orders. We also secured an account with the Home Shopping Network. This growth spurt presented a new chapter and a new challenge.

That’s when we met RSF and received a line of credit from the Women’s Capital Collaborative so that we could expand our product line and build our inventory. In the fall of 2018, RSF increased the loan, which helped with key hires, business development, and digital marketing.

We’re growing rapidly, but it’s essential that we preserve our mission, and in 2018, we adopted a hybrid business model to do this. The Akola brand became a for-profit public benefit corporation focused on sales, marketing, and design. Akola “purchases” products from Akola, providing an earned income stream for the nonprofit. Over time, this earned

(CONTINUES ON P 11)

RS

F

AN

NU

AL

R

EP

OR

T

20

18

11

Akola employee, Monica Kanya, with fellow members in Uganda.

Photo by Mary McLeod.

$230K $5 30K

TOTAL GIFTS RAISED: $4 MILLION

WOMEN’S CAPITAL COLLABORATIVE HIGHLIGHTS

A CT IV IT Y

$2.1 MILLIONIN NEW GIFTS FROM

20 DONORS

GRANTS LOANS

GRANTS AND LOANS WERE PROVIDED TO

19 SOCIAL ENTERPRISES

The Women’s Capital Collaborative

is a philanthropic initiative that

partners with women entrepreneurs

to provide them with crucial growth

capital when they need it most.

CONT RIBU T IONS

53%

income stream will be used to help fund Akola Academy’s work providing wraparound services like wellness counseling, financial literacy, and other services to help employees further their careers. This structure allows the flexibility to grow our business and the ability to take care of staff and maximize impact.

Akola recently expanded its distribution to an additional six retailers, including a volume line for CVS drugstores. Its success continues to allow women to escape poverty, kick-start careers, or become entrepreneurs. The Akola Academy is also launching an alumni program to match former employees in Dallas with

career coaches, helping them get retail training and credentials.

With the hybrid organization, Akola’s goal is to distribute $25 million in wages, impacting over 1,000 women by 2029 (it’s already paid $1 million). RSF has the stamp of approval in the investing community at large and fosters an inclusive networking community. Whether it’s a capital need or a connection with another social enterprise, RSF is an ally.

11

IN

VE

ST

.

GI

VE

.

GE

T

FU

ND

IN

G.

12

IN

VE

ST

.

GI

VE

.

GE

T

FU

ND

IN

G

S O C I A L E N T E R P R I S E P R O F I L E

Crown O’ Maine Organic Cooperative CROWNOFMAINECOOP.COM

Crown O’ Maine is the leading distributor of local organic products in Maine. Since 1995, this

co-op has distributed a wide selection of goods, including fruits, vegetables, grains, beans,

meat, seafood, and dairy, to retail establishments, restaurants, and local buying clubs from

more than 200 producers. RSF has provided loans to Crown O’ Maine from the Food System

Transformation Fund and a grant from the Local Food Capital Collaborative.

Part of our mission is to

build pathways to market

for rural producers,

especially in traditionally

agricultural areas where

we can invest in rebuilding

Maine’s food system.”

Crown O’ Maine (COM) was founded in 1995 from a remote farm in Northern Maine to get the area’s agricultural products to a broader audience. Maine had been conventional, large-scale potato farms, which were disappearing in the 1990s, and farmers were transitioning crops. The family’s second generation has run the business since 2008, and as a co-op, we find solutions for farmers to help increase local food production and consumption and strengthen our food system.

Distribution is a misunderstood part of the food system in that it is highly specialized and geared toward large entities. At COM, we offer a variety of services that are essential to

maintain local product’s visibility. We curate a catalog of goods, streamline ordering and delivery, and perform unglamorous, but necessary, functions of a food system like food safety, inventory management, and bookkeeping. There are only a handful of distribution businesses that are still owned by Mainers, and we’re able to return profits to our worker-owners and investors.

The initial choice to become a cooperative wasn’t hard—there weren’t any workers yet. But the staying power has been difficult, and we’ve made some conscious decisions to remain a worker co-op. We have 10 employees and seven of them are worker-owners.We received the first loan from RSF in 2011,

and over the years, we’ve received additional loans for trucks and working capital. We’ve also received a technical assistance grant to help us expand our staff to include a finance director and a grant to develop a cluster of producers in northern Maine who lack access to larger markets. Part of our mission is to build pathways to market for rural producers, especially in traditionally agricultural areas where we can invest in rebuilding Maine’s food system.

Currently, our goals are to become profitable (we’re close to the breakeven point) and to grow our year-round sales programs. Maine is highly seasonal: the year-round population is

(CONTINUES ON P 13)

RS

F

AN

NU

AL

R

EP

OR

T

20

18

13

Marada Cook, second generation, head of Crown O’ Maine.

TOTAL NOTES:

$5.79 MILLION

FOOD SYSTEM TRANSFORMATION FUND

HIGHLIGHTS

A CT IV IT Y

$1.45 MILLIONIN NEW NOTES

$3.69MTOTAL PORTFOLIO

$500KNEW LOANS

20INVESTORS ARE

SUPPORTING

19BORROWERS

The Food System Transformation Fund

lends to social enterprises with replicable

strategies that have impact across the

food and agriculture supply chain.

25%

INV EST OR NOT ES

1.2 million and grows to 8 million in summer, which coincides with the growing season. We want to build out year-round opportunities for our core customers, which will allow us to expand profitably throughout the year. As part of our efforts to restructure our finances for future sustainability, we’re launching a new co-brand called 50 Small, which will list the name of the farm. This is an opportunity for our producers to work together so that we can open wider markets for our farms, including outside of Maine.

To help us reach these goals, we are raising capital through the sale of Class B shares (modeled by Equal Exchange) to fund these initiatives and help us move into the future sustainably, adding equity to strengthen the co-op, since it will take time for these programs to demonstrate profitability. These shares are great for a socially motivated investor: our job is not to make investors a ton of money; our job is to make producers more profitable and sustainable.

13

IN

VE

ST

.

GI

VE

.

GE

T

FU

ND

IN

G.

14

S O C I A L E N T E R P R I S E P R O F I L E

Eureka Recycling EUREKARECYCLING.ORG

Eureka Recycling is one of the largest nonprofit recyclers in the U.S. and emphasizes “zero-waste”

principles in the communities of Minneapolis and St. Paul. Its services, programs, and policy work

present real solutions to the social, environmental, and economic problems caused by waste.

RSF has provided loans to Eureka Recycling from the Regenerative Economy Fund and the Social

Investment Fund.

Our voice is being heard

alongside industry,

policymakers, and activists

because we have the

perspective of operators,

and we’re able to contribute

to conversations about

our future, not just around

recycling, but around the use

of resources and extraction

and consumption.”

Eureka Recycling’s mission is to demonstrate that waste is preventable, not inevitable. We do our work through the lenses of stabilizing the climate, strengthening local economies, and creating healthier and more equitable communities. Because of this, we make very different choices toward that triple bottom line of environment, people, and the economy, rather than merely using recycling to make money. This is made visible in things like who we choose to sell our material to, how we pay and support our staff, and what we do to provide career development and a

career pathway. This is becoming increasingly important based on what is happening with automation and artificial intelligence in the workplace, and we recognize that this is part of how our work intersects with our community and our local economy.

We became involved with RSF in 2013 at a time when we needed to complete a fairly significant capital investment in our facility that would allow us to remain relevant in the marketplace, but at the same time, we wanted to remain faithful to our values as

an organization. Since then, we’ve taken out additional loans with RSF to finance a new fleet of trucks, upgrades to our Materials Recovery Facility, and for some of our working capital needs. Our organizations have grown together and have learned significantly from each other.

The recycling industry is in a unique moment right now because of changes that have been taking place in the past two years. Commodity levels are at an all-time low because of the changes in the international market, and while it’s causing challenges, it also allows for

(CONTINUES ON P 15)

RS

F

AN

NU

AL

R

EP

OR

T

20

18

15

Eureka Recycling team on bales. Photo by Mark Kegans.

TOTAL NOTES:

$1.85 MILLION

REGENERATIVE ECONOMY FUND HIGHLIGHTS

A CT IV IT Y

$100KIN NEW NOTES

5%

$1 .28MTOTAL PORTFOLIO

$560KNEW LOANS

T h e R e g e n e r a t i v e E c o n o m y F u n d s u p p o r t s s o c i a l e n t e r p r i s e s t h a t m a k e c l e a n e n e r g y b r o a d l y

a c c e s s i b l e , c r e a t e p r o d u c t s w i t h s u s t a i n a b l e m a t e r i a l s , an d

d i v e r t w a s t e f r o m l a n d f i l l s .

INV EST OR NOT ES

a larger conversation about waste and why recycling matters. At the same time, there is a heightened awareness of waste, specifically plastic waste, in our environment. In the long run, we believe that there is a significant opportunity to implement solutions to these current problems that will move us closer to a truly circular economy and zero-waste society.

For us, it’s been interesting to see how the demand for our perspective in this dialogue has increased. Our voice is being heard

alongside industry, policymakers, and activists because we have the perspective of operators, and we’re able to contribute to conversations about our future, not just around recycling, but around the use of resources, extraction, and consumption. Where we see this going for Eureka Recycling is to continue to be an experiment in the laboratory of exploring our pathways to zero-waste.

15

IN

VE

ST

.

GI

VE

.

GE

T

FU

ND

IN

G.

16

S O C I A L E N T E R P R I S E P R O F I L E

Biodynamic Association BIODYNAMICS.COM

The Biodynamic Association (BDA) awakens and enlivens co-creative relationships between

humans and the earth, transforming the practice and culture of agriculture to renew the vitality

of the earth, the integrity of our food, and the health and wholeness of our communities. RSF

has provided grants to support many aspects of the BDA’s work, including its annual conference,

farmer training program, and collaboration with other biodynamic organizations and initiatives.

..

We are looking at how

to weave diversity and

social justice throughout

our work. That includes

building relationships

between biodynamic

practitioners and

Indigenous and traditional

land-based communities

across the Americas,

seeking to develop mutual

understanding, and explore

possible collaborations.”

The BDA was founded in 1938 and continues to be committed to building sacred connections between humanity, the earth, and the cosmos; generating healthy soil, plants, and animals and abundant, nutritious food; and creating meaningful lives.

The interest in biodynamic agriculture has grown tremendously in recent years: membership in the BDA is at a record high of 1,700, and attendance at the BDA’s North American Biodynamic Conference nearly tripled from 350 participants in 2010 to 900 in 2018. Along with that growth, we’ve been actively working to broaden the diversity of people who participate in our gatherings,

realizing that the full spectrum of cultures and backgrounds has not always been present. In addition to bringing diverse perspectives to the conference and providing scholarships to those who may not be able to attend otherwise, we are looking at how to weave diversity and social justice throughout our work. This includes building relationships between biodynamic practitioners and Indigenous and traditional land-based communities across the Americas, seeking to develop mutual understanding and explore possible collaborations.

Training and education have always been at the core of the BDA’s work. We have pioneered

interactive online learning to make biodynamic education more accessible, and recently created the Biodynamic Farmer Foundation Year, which integrates weekly interactive online sessions with hands-on work on the ground, in partnership with a network of biodynamic mentor farms across North America. This program welcomes both new farmers and those who are transitioning to biodynamics, and brings them together with the help of technology to be part of a learning cohort.

(CONTINUES ON P 17)

RS

F

AN

NU

AL

R

EP

OR

T

20

18

17

GRANTEES:

206

$3.6 MILLION

I n g r a n t s f r o m c o l l a b o r a t i v e s ,

f i e l d o f i n t e r e s t f u n d s ,

s e e d f u n d , a n d s h a r e d g i f t i n g .

48%

14%

Educat ion and the Arts

Cl imate and Envi ronment

Socia l F inance and Other

Food and Agr icu l ture

Indigenous Communit ies

Women and Gi r ls

5%

GRANT HIGHLIGHTS

D ONOR A D V ISED FU ND S

$20 MILLION IN GRANTS

GRANTEES:

5 04

9%

10%

15%

BY FOCUS AREA

OT H ER FU ND S

BDA Farmer training apprentices and mentor

farmers at Live Power Farm in

Covelo, California.

Our innovation in programs parallels innovations in the way we work as an organization. Our organizational structure is based on “Reinventing Organizations” and Holacracy, and we have shifted to become a geographically distributed team. We’re able to think creatively, explore new ways to build community and connection, and facilitate meaningful learning and relationships across distance.

As we look ahead, the BDA plans to continue to focus on growing the biodynamic community and awareness of biodynamic practices. We’re exploring how we can empower people to take leadership to further the work locally and plan to launch a biodynamics leadership incubator.

17

IN

VE

ST

.

GI

VE

.

GE

T

FU

ND

IN

G.

18

PA RT N E R P R O F I L E

Chordata Capital CHORDATACAPITAL.COM

Founded by Tiffany Brown and Kate Poole, Chordata Capital is an investment advisory firm

that partners with people with inherited wealth to design and implement investment portfolios

that embody an explicit commitment to racial and economic justice. Tiffany and Kate were

Fellows in the first cohort of RSF’s Integrated Capital Institute.

My motivation for

participating in the

Integrated Capital Institute

was exploring what

authentic partnership could

look like across race and

class. Tiffany and I wanted

to model this vision of the

co-leadership (while being

vulnerable, sharing risk,

power, and wealth) needed

to build the institutions to

develop our economy.”

KATE: My background is that I have inherited wealth and have done work around local investing and building the new economy. Over the past decade, I’ve worked to gain clarity on investments that were held in my and my family’s name and explore how to better align them with my integrity and values. As part of that journey, I became involved with Resource Generation, which is a community of young people with wealth who are committed to the equitable distribution of wealth, land, and power.

I met Tiffany at my first Resource Generation conference in 2013, and in 2017, we co-facilitated a workshop on the solidarity economy and investing in racial and economic justice together. We realized we wanted to work together and launch an investment advisory firm that would help people align their wealth with racial justice, reparations, and repair.

TIFFANY: I have a background in donor organizing and have worked with people with inherited wealth who were finding their place in the larger social justice movement. Through my work with Resource Generation, I learned about socially responsible investing. I explored the inner workings of socially responsible investment firms when I took a job with one. I learned that often questions that are important to me weren’t being asked. I chose to become an ICI Fellow because I was seeking a community of people who wanted to do things differently. The ICI played a huge role in bringing Kate and me together and supported my belief that this leap was necessary and possible. We wanted to create something new and saw great potential in our unique identities working together toward the common goal of investing in the solidarity economy.

KATE: My motivation for joining the ICI was exploring what authentic partnership could look like across race and class. Tiffany and I wanted to model this vision of the co-leadership (while being vulnerable, sharing risk, power, and wealth) needed to build the institutions to develop our economy.

We worked on Chordata Capital while we were ICI Fellows and launched in September 2018. Our ICI cohort was a brilliant, dynamic group and had a clear vision of the need for reparations and a massive redistribution of wealth. It was within that vibrant ecosystem that Tiffany and I developed the clarity of

(CONTINUES ON P 19)

RS

F

AN

NU

AL

R

EP

OR

T

20

18

19Chordata Capital founders Kate Poole & Tiffany Brown (far left)

with ICI Fellows.

INTEGRATED CAPITAL INSTITUTE FELLOWS

W e h a v e a l o n g - t e r m c o m m i t m e n t

t o e d u c a t e , s u p p o r t , a n d i n s p i r e t h e

n e x t g e n e r a t i o n o f i n t e g r a t e d c a p i t a l

p r a c t i t i o n e r s , a n d c a t a l y z e t h e f l o w

o f m o n e y t o s u p p o r t r e g e n e r a t i v e

e c o n o m i e s i n a l l c o m m u n i t i e s . T h e

I n t e g r a t e d C a p i t a l I n s t i t u t e i s a

n i n e - m o n t h p r o g r a m t h a t p r e p a r e s

F e l l o w s t o a c t i v a t e t h e p o s i t i v e

p o t e n t i a l o f c a p i t a l . I n a d d i t i o n t o

d i v e r s e b a c k g r o u n d s , t h e F e l l o w s

c o m e f r o m a r o u n d t h e U n i t e d S t a t e s

a s w e l l a s i n t e r n a t i o n a l l o c a t i o n s .

39%

West

Midwest

Northeast

South

Internat ional15%

8%

F E L LOWS BY G EO G R A P H Y

17%

21%

purpose of our work and saw how we could leverage our connections with people of wealth toward this shared goal. The ICI and RSF staff have contributed beautifully to our thinking about finance, the role of investment advising, and what’s possible.

TIFFANY: We’re grateful to be in the Integrated Capital community with RSF, our ICI cohort, our colleagues, and our clients. The working relationship that Kate and I have

developed demonstrates that it’s possible to move beyond identity-based organizing and weave together visions for the future. We want to create an economy that works for everyone, and we realize that it’s not working for any of us in any of our different identities. It’s imperative that we figure out how to do this healing repair work.

19

IN

VE

ST

.

GI

VE

.

GE

T

FU

ND

IN

G.

20

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

F I N A N C I A L S

2018 2017 2016

Dollars in thousands

ASSETS

Cash and cash equivalents $ 27,867 $ 30,430 $ 13,385

Mission-related loans and investments

Loans receivable, net of allowance 132,980 105,459 97,238

Investments 63,060 70,351 76,060

Prepaid expenses and other assets 2,007 2,516 1,241

TOTAL ASSETS $ 225,914 $ 208,756 $ 187,924

LIABILITIES AND NET ASSETS

LIABILITIES

Accounts payable and accrued expenses $ 906 $ 489 $ 226

Investor notes payable 129,265 119,771 112,518

Other notes payable 8,105 6,002 6,006

TOTAL LIABILITIES $ 138,276 $ 126,262 $ 118,750

NET ASSETS

Net assets without donor restrictions $ 87,488 $ 82,344 $ 68,773

Net assets with donor restrictions 150 150 400

TOTAL NET ASSETS $ 87,638 $ 82,494 $ 69,173

TOTAL LIABILITIES AND NET ASSETS $ 225,914 $ 208,756 $ 187,924

RS

F

AN

NU

AL

R

EP

OR

T

20

18

21

F I N A N C I A L S

* RSF earned additional revenues through fee income from its philanthropic services. Following GAAP standards, we do not show this income in our financial statement because of its classification as intracompany transfers.

** Allocation between grants made to programs and management and general expenses differed between 2018 and prior years due to new GAAP standards effective January 1, 2018.

+ Personnel costs varied 2018 versus 2017 due to a change in how overhead costs are allocated between those costs and management and general expenses.

CONSOLIDATED STATEMENTS OF ACTIVITIES & CHANGES IN NET ASSETS

2018 2017 2016

Dollars in thousands

REVENUES

REVENUES, GAINS, AND OTHER SUPPORT*

Lending interest, fees, other income $ 7,780 $ 5,955 5,519

Investment income, net 1,101 288 (421)

Gifts and contributions 29,361 34,495 20,565

Program revenue 231 255

TOTAL REVENUES, GAINS, AND OTHER SUPPORT $ 38,473 $ 40,993 $ 25,662

EXPENSES

PROGR AM SERVICES

Interest expense on investor funds $ 1,411 $ 1,036 $ 618

Loan loss provision 1,016 65 400

Grants made to programs** 17,014 18,435 13,236

Other projects and program expenses 2,423 642 898

Personnel costs+ 3,044 5,329 3,470

TOTAL PROGRAM SERVICES $ 24,908 $ 25,507 $ 18,622

SUPPORTING SERVICES

Management and general expenses** + 8,421 2,166 4,138

TOTAL EXPENSES $ 33,329 $ 27,672 $ 22,761

CHANGES IN NET ASSETS 5,144 13,320 2,902

NET ASSETS AT BEGINNING OF YEAR 82,494 69,173 66,272

NET ASSETS AT END OF YEAR $ 87,638 $ 82,494 $ 69,173

IN

VE

ST

.

GI

VE

.

GE

T

FU

ND

IN

G.

22

Toward a More Inclusive EconomyBy RSF’s Diversity, Equity, and Inclusion (DEI) Committee

RSF has long championed the need to transform how we work with money, from a focus on transactions to relationships, and from a focus on short-term gains to long-term vitality. But prior to a few years ago, we had not explicitly reflected upon the degree to which racism and patriarchy have shaped the American financial system and capitalism in general.

Since early 2015, RSF has intentionally engaged in conversations about diversity, equity, and inclusion (DEI) and has grappled with the ways our organizational culture and funding strategy have, and have not, aligned with the movement toward racial and economic justice. We continue to bring humility and a sincere desire to listen and learn to deepen our engagement with DEI practices. We are seeking growth and transformation not just because “it’s the right thing to do” (which it is) or because “diverse teams perform better” (they do), but because

we want to continue to use our organizational privilege to create systems change.

To transform finance and build a truly regenerative and equitable financial system that serves people and the planet, we need to understand and reconcile with the past and confront injustices that are intentionally and systematically embedded in the economy. We must acknowledge how we all have been part of the problem, and how we can be a bigger part of the solution.

Awareness and honest conversation are the first steps to making an authentic change. Internally, we acknowledge the fact that while we are proud of how gender diversity shows up at RSF (85% of managers at RSF identify as female; four out of seven members of the Executive Team identify as female, and four out of nine Trustees identify as female), we are also experiencing an all-too-common pattern within financial organizations: the majority of our senior-level staff members are white.

We recognize that to create lasting systemic change, we must approach this internally (who we are as individuals and as a team) and externally (how and who we fund). To that end, we deepened our commitment to DEI through hosting intentional conversations, engaging in assessment projects, and outlining actionable next steps. The following captures some of the 2018 initiatives:

• DEI work was named as a key priority in RSF’s annual operating plan by the executive team, who committed to their learning journeys and to holding each other

accountable during conversations about resource allocation, promotions, and salary changes.

• In addition to our established DEI committee, we formed employee resource groups for colleagues of color and anti-racist white allies.

• Both staff and board had training on racial justice, power and privilege, and nonviolent communication.

• Every department has been applying a DEI lens to its program design, processes, and approach to client engagement work.

We are grateful for the ways our former and current clients and partner organizations have shared stories from their DEI work and the ways they have encouraged our own DEI journey.

O R G A N I Z AT I O N A L C U LT U R E

RSF has long

championed the need

to transform how we

work with money, from

a focus on transactions

to relationships, and

from a focus on short-

term gains to long-term

vitality.”

RS

F

AN

NU

AL

R

EP

OR

T

20

18

23

Jasper J. van Brakel Chief Executive Officer

Jocelyn Romero Demirbag

Jovial King

Mark Finser

Neil Blomquist

Rachael Flug

Ron AlstonChair of the Board

Scott Williams

Siegfried Finser

Stephanie Rynas

Our Board

Our Staff We deeply value and cultivate the relationships we have with our clients, and actively seek new relationships with wider circles where there is interest in transforming the current financial system. We work hard every day to serve our investors, donors, social enterprises, and partners in the field in a way that honors their purposes and supports regenerative practices.

Alexandria Cabral Senior Credit Associate

Amy Beck Manager, Client Engagement

Amy BirdSenior Manager, Social Enterprise Lending

April HinesChief Financial Officer

Carrie StallingsSenior Manager, Information Systems

Casey JohnsonManager, Social Enterprise Lending

Deb NelsonVice President, Client & Community Engagement

Diane RobinsonOffice Manager & Executive Assistant

Donna DanielsDirector, Client Engagement

Ellie LanphierProgram Manager, Philanthropic Services

Emma NotoProgram Associate, Philanthropic Services

Hadiza DalhatuProcessing & Servicing Associate, Loan Administration

Jasper van BrakelChief Executive Officer

Jen DobrowolskiMarketing Manager

Jennifer LeeLegal Operations Associate

John BloomVice President, Organizational Culture

John MeyersMarketing Associate

Joki KaleSenior Accountant

Kate DanaherChief Lending Officer

Katrina SteffekChief Operating Officer

Kayla LeducSenior Program Associate, Philanthropic Services & Client Engagement

Kelley BuhlesSenior Director, Philanthropic Services & Organizational Culture

Kristine ArboledaAccounting Manager

Leah JohnsonSenior Manager, Loan Administration

Lisa BarrySenior Manager, Human Resources

Mark HerreraSenior Manager, Client Engagement

Melinda CheelSenior Director, Marketing

Meredith StortonManager, Social Enterprise Lending

Mindy Christensen Senior Director, Credit

Muy YamHuman Resources Manager

Neha KapurCredit Manager

Raquel IglesiasSenior Associate, Philanthropic Services

Reed MayfieldManager, Social Enterprise Lending

Shu Dar YaoHead of Investments

Steven ChaiSenior Credit Associate

Stu FramManager, Social Enterprise Lending

Tammy ChildersSenior Portfolio Manager, Social Enterprise Lending

Tim GreenGeneral Counsel

RS

F

AN

NU

AL

R

EP

OR

T

20

18

23

IN

VE

ST

.

GI

VE

.

GE

T

FU

ND

IN

G.

24 © 2 0 1 9 R S F S O C I A L F I N A N C E I 1 0 0 2 O ’ R E I L LY AV E N U E , S A N F R A N C I S C O, C A 9 4 1 2 9 I T E L . 4 1 5 . 5 6 1 . 3 9 0 0 I R S F S O C I A L F I N A N C E .O R G